BuyCostumes Prepares Strategy to Avoid Halloween Surprises

Buycostumes.com has lowered its shipping charges and tweaked packaging methods for the Halloween shopping season.

The shipping surcharge has dropped from $5.99 to $3.99 after a survey of 150 consumers during the summer indicated that the company's delivery rates were too high.

To help absorb the lost fulfillment revenue, Buycostumes.com has renegotiated its volume-based agreement with United Parcel Service. The company also will increase the drop-shipping of orders from its manufacturer partners to reduce its the fulfillment backlog at its warehouse in Waukesha, WI.

Beginning with orders filled this month Buycostumes.com is offering a 5 percent discount on future orders, an offer that will continue through 2002.

The offer provides each customer with a customer identification number that can be used to redeem the discount. The individual ID number as well as Buycomstumes.com's URL and toll-free number appear on a full-color, one-sheet insert explaining the discount and on a BuyCostumes-branded refrigerator magnet. The firm also has begun using company-branded boxes for its deliveries.

The back-end changes are meant to help boost customer loyalty as the firm expects sales and customer acquisitions to pick up because of upcoming marketing plans for Halloween.

A text-based e-mail campaign to customers explaining the discount and showcasing new costumes is planned. Buycostumes will run ads or participate in Halloween-related editorial in magazines such as In Style, Parent, Newsweek and Martha Stewart Living in the coming weeks.

The firm has struck agreements with upcoming Renaissance fairs to promote its costume category serving that demographic. Promotional deals for television have been made with the Cartoon Network and Fox Kids.

Though not divulging dollar figures, the privately held company said its sales have climbed tenfold during the last three weeks as the result of an affiliate and banner ad program that began in May with Commission Junction.

Diana Krohn, director of Internet marketing for Buycostumes, said sales resulting from the program climbed steadily during summer before starting to surge in August.

"Commission Junction said that it usually takes about three months for the sales to ramp up, and that's what happened with us," she said.

Buycostumes, which has an average order size of $51, also has enlisted in pay-for-placement programs with search portals such as AOL, GoTo and Looksmart. The site usually pays 5 cents per lead for the placements.

Krohn said that though the marketing agenda is detailed for the Halloween season, the overall budget is modest.

"We're pretty stingy when it comes to marketing," she said "Right now rather than spending a lot on advertising, we are focusing on customer retention with ideas like the discount."

The 2-year-old company, which hopes to turn its first profit by end of year, will launch a new Web site, Buyseasons.com, on Oct. 15 that will offer seasonal home decorations for occasions like Halloween, Christmas and birthdays. Creative elements for the redesign were still being developed at press time.

Buycostumes customers will be able to use their 5 percent discounts at the new site.